Seòmar agus comataidhean

Do you want me to move to my next area, convener?

Thank you all for joining us this morning. I would like to ask the same question of you all, but I will start with Emma Congreve. Is Brexit already baked into UK and Scottish economic performance or will it have a continuing and latent impact? If so, what do you think that will be?

I will stay with Professor Chadha to address investment. Each economic crisis can be different. After the financial crash, the Scottish Government embarked on a construction-led investment recovery. In 2010, it was estimated that around one third of all construction that was being done in the UK at that time was being done in Scotland. That was underpinned by building of the Queensferry crossing, by rail construction and so on.

Inflation and other aspects affect capital investment and the ability of businesses to invest. What is your take on where we are with business investment and the impact of the UK Chancellor of the Exchequer’s recent budget statement on business investment? Renewables are particularly important to the Scottish economy, as they are to the rest of the UK economy. What impact will the measures in the chancellor’s statement have on investment for recovery? Is that a route forward from the crisis or will progress be constrained by inflation?

I ask Professor Chadha to answer first then, if we have time, I would be interested to hear the perspective of the other witnesses.

Finally, can Emma Congreve address business investment, particularly around renewables? A pipeline that has certainty encourages people to invest, but issues from the UK chancellor’s statement might impact on that. I am interested to know whether you think it will. It will clearly have implications for certainty for the Scottish Government and for where businesses can invest, in particular to deliver renewable energy and net zero.

I am conscious that it is a big question. I will come to Susan Murray. Feel free to do a top-line summary, if that is helpful.

Susan Murray, where do you see business investment going as a result of the UK chancellor’s statement? What would you expect from the Scottish budget that would help business and investment, and what is the potential impact of public investment on private business?

Minister, you referred to carbon capture and storage. The Net Zero, Energy and Transport Committee, which I also sit on, produced a report on the Acorn project on carbon capture, utilisation and storage earlier this year and made it clear that it is a key energy transition requirement, but the project has been put on pause.

During the Net Zero, Energy and Transport Committee’s evidence session on the subject, Professor Haszeldine said that the project needed to be in operation by 2030 and that

“There is a five-year lead time for building such a project, so deciding now how we are going to handle that is fundamental to Scotland being able to meet or failing to meet its 2045 net zero target.”—[Official Report, Net Zero, Energy and Transport Committee, 14 December 2021; c 14.]

Clearly, the Climate Change Committee has just brought out a very critical report, but that committee has said that that project is vital to the delivery of these very tough targets.

The Acorn project is located in the north-east of Scotland and we are here to focus on just transition, which is about the workforce and communities. Bearing that in mind, and the fact that this is a transition technology in a vital area for workforce skills, which would help with the shift from oil and gas to green hydrogen as a bridging technology, where do you think we are with that project and how critical do you think it is to delivering a just transition for Scotland?

I also want to ask about the £500 million just transition fund for the north-east and Moray. Obviously, some projects have already been announced. I understand the importance of community co-operation and co-design, and of projects coming from communities. Every one of the 24 projects is worthy in and of itself, but it might be a fair criticism to say that they could be piecemeal if they are based on challenged funding.

There might be a need for a more strategic approach to such a significant element of funding. Some projects might come from private companies that could fund the projects themselves, so how are you balancing out the worthiness of each project? How are you making sure that, as opposed to supporting individual projects, there will be a strategic impact that will deliver a just transition? I understand that there is a tension there, so could you share your thinking about the funding mechanism and process?

What is your relationship with the Just Transition Commission and how do you work with it? Can you provide evidence that you have already actioned some of the advice that the commission gave in its first report and in its latest report?

This question might help our discussion. Graham Simpson asked about transport and I asked about energy. You are not the lead minister or cabinet secretary in those areas; you are our first ever just transition minister. It would be helpful if you could explain how you work with ministers in other policy areas and what levers you have to influence and push the agendas that we know will be critical to delivering a just transition in areas for which you might not have direct responsibility.